Sweden: October inflation review
Swedish inflation surprised on the downside in October, with CPI at 0.91% y/y versus our forecast of 1.17%, CPIF at 1.13% versus 1.39%, and CPIF excluding energy at 0.11% versus 0.47%. Monthly changes were 0.02%, 0.02% and −0.15%, respectively.
Services prices fell 0.3% m/m, with recreation and culture standing out at −2.4%, subtracting around 0.2pp from the monthly CPI reading. The limited details make it too early to tell how much of the weakness reflects volatile travel-related prices rather than a broader slowdown in services inflation. We will know more next week when the details are released.
The expiry of the first temporary fuel tax cut on 1 October reduces the tax-related drag on CPIF. Electricity prices have been high, particularly in the Malmö area, although the increase there was partly offset by lower prices in the other regions. Energy prices overall rose 2.3% m/m.
Author
Danske Research Team
Danske Bank A/S
Research is part of Danske Bank Markets and operate as Danske Bank's research department. The department monitors financial markets and economic trends of relevance to Danske Bank Markets and its clients.
